What is the warranty reserves report and how do I read it?

Purpose

This article explains what warranty reserves are, why they exist, and how to read the Warranty Reserves report. This report helps you track money set aside for future warranty or callback work and compare it to actual costs.

When To Use This

Use this when you need to:

• Track money reserved for warranty or callback work
• Compare reserves against actual warranty costs
• Review financial exposure before month-end close
• Understand how warranty work impacts bonuses

Before You Start

Before using this report:

• Warranty reserves must be enabled for your organization
• ProPays must be approved or paid
• Warranty or callback time must be recorded correctly

Step-by-Step Instructions

Step 1: Understand what warranty reserves are

Warranty reserves are a portion of the labor budget set aside before bonuses are calculated.

They exist to cover:

• Warranty work
• Callback work
• Future service obligations

This ensures bonuses are based on productive work, not money needed later for fixes.

Step 2: How warranty reserves affect bonuses

When warranty reserves are enabled, Protiv automatically:

• Takes a percentage of the labor budget
• Sets it aside as a reserve
• Calculates bonuses on the remaining amount

Example:
If the labor budget is $10,000 and the reserve is 5%,
$500 is set aside and bonuses are calculated on $9,500.

Step 3: What the Warranty Reserves report shows

The report shows two types of records:

• ProPay reserves
  Money set aside when ProPays are approved or paid.
• Warranty or callback work
  Actual labor costs from warranty or callback time entries.

Together, these show how much you planned for warranty work versus how much you actually spent.

Step 4: How to read the report

Each row represents either a reserve or a cost and includes:

• Job ID: The unique identifier of the job associated with the warranty reserve entry. Links the warranty reserve to the specific job/project
• Type: The record type indicating whether this is a reserve or an actual cost (Reserve or warranty)

• Job / Milestone: Descriptive information about the work unit

• Propay: The ProPay ID that created the reserve
  
• Client: The client/customer name
• Branch: The business location/branch where the work was performed
• Division: The organizational division/department
• First Check-in: The earliest date/time when work began on this job/milestone
• Last Check-in: The latest date/time when work ended on this job/milestone
• Debit/credit: The monetary amount associated with this entry. Shows the financial impact of each warranty reserve transaction

Step 5: Key metrics explained

At the top of the report, you’ll see a balance summary:

• Current Balance: This is the difference between reserves and costs. Net warranty reserve position

  Balance = Total Credit – Total Debit.

  It shows whether your reserves are ahead of or behind actual warranty costs.

• Total Debit: This is the total amount spent on warranty or callback work.

  Comes from actual warranty time entries. Represents real labor costs already incurred

  Think of this as: “How much warranty work actually happened?”

• Total Credit: This is the total amount of money set aside as warranty reserves. Comes from ProPay reserves. Represents funds held back from bonuses
  
  Think of this as: “How much money did we plan for future warranty work?”

Step 6: How to interpret the balance

• Positive balance: You’ve set aside more than you’ve spent on warranty work. 

  Reserves are sufficient.

  • Example: $10,000 reserved – $8,000 spent (debit)= +$2,000 balance
• Negative balance: Warranty work has cost more than what was reserved. Reserves were not sufficient
  • Example: $5,000 reserved – $7,000 spent = –$2,000 balance

• Zero balance: Reserves exactly match warranty costs. Ideal equilibrium

  No over- or under-reserving

  • Example: $5,000 reserved – $5000 spent = $0 balance

Step 7: Use filters to drill down

You can filter the report by:

• Date
• Type: Reserve vs warranty work
• Job or client
• Branch or division

This helps identify where warranty costs are coming from and whether reserves are sufficient.

Examples

• An owner checks if warranty reserves are covering callback costs.
• Finance reviews reserve balances before closing the books.
• Ops identifies jobs with high warranty activity.

Common Mistakes & How To Fix Them

• Expecting this report to show payroll bonuses
  Fix: This report tracks reserves and warranty costs, not payroll.
• Seeing a lower bonus and thinking it’s an error
  Fix: Warranty reserves intentionally reduce the bonus pool.
• Ignoring negative balances
  Fix: Review reserve percentage or warranty activity.